London lifts Premier Inn and Costa-owner Whitbread

The biggest growth in the budget hotel business will continue to be in London as companies trim down on costs and send their workers to cheaper accommodation, according to Premier Inn-owner Whitbread.

Chief executive Andy Harrison revealed sales at the hotel group were up 17% in London and he plans to grow the business from 54,000 rooms today to 75,000 rooms by 2018 – with a third in the capital.

With businessmen accounting for 60% of London customers, he said: “It’s difficult to think back to the heady days of 2007, but we offer really good value and people know exactly what they are going to get, so it really does appeal.”

It comes as the company revealed that full-year results for Whitbread, which also owns coffee chain Costa, would hit the top end of forecasts, sending shares up 5%, as sales jumped 6.8% on a like-for-like basis in the 11 weeks to February 13.

At Costa, Harrison said customers spent more money over Christmas as they were particularly taken by the speciality coffees such as gingerbread latte and black forest hot chocolate.